ISO To File Terrorism Forms
Even before President George W. Bush signed the Terrorism Risk Insurance Act into law, the Insurance Services Office Inc. announced that it would file new commercial lines policy forms and rating information to help its members handle the new coverage.
The law voids terrorism exclusions on in-force policies, as well as state regulatory approvals for such exclusions to the extent they apply to losses covered by the act. Insurers are permitted to reinstate the preexisting terrorism exclusions if policyholders advise in writing they are declining terrorism coverage or do not pay the additional premium for terrorism coverage.
ISO said that in response to the new law, it is developing and filing new policy forms for insurers to use on existing, new and renewal policies. "These policy forms will provide insurers with the tools to implement the coverage aspects of the federal program in a timely manner and to manage the overall terrorism exposure," said Frank J. Coyne, chairman, president and chief executive officer for the Jersey City-based ISO.
ISO will also file rating information for the various terrorism coverage options. This information will incorporate analysis from the recently released Terrorism Loss Estimation Model developed by AIR Worldwide Corp., a wholly owned ISO subsidiary. ISO said its rating information will include prospective loss costs for commercial property policies, percentage surcharges for general liability policies, and a combination approach for businessowners policies.
ISO said it is also developing sample disclosure notices that insurers can use to meet the acts requirement to disclose the premium they charge for insured losses covered by the law and the federal governments share of compensation for those losses.
"We are committed to providing insurers with necessary coverage and pricing tools to respond to this act as quickly as possible," said Mr. Coyne. He said ISO recognizes "the urgency for insurers as they gear up to meet the needs of various business sectors–especially construction, real estate and related services. They and others have been forced to curtail or defer work without coverage against the catastrophic exposure of large-scale terrorism."
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, December 8, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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